Higher Wages Put More People to Work

In January, the town of Seatac, Washington, put in to effect a new $15 per hour Minimum Wage. No ramp ups, no tiered implementation. One day it was the state standard, the next, the highest minimum wage in the nation. The Koch Brothers sank a fortune to fight this measure, which fell on deaf ears as the town rejected their trickle-down theories and instead voted for the measure. The result is that for one town, they became a test bed, to put the theories behind trickle-down economics to the test.

Now, nine months on, we are witnessing one of the most dramatic recoveries in the Pacific Northwest.

Last July, business owner Scott Ostrander claimed that the increased wage would force him to lay off staff, if not shut down his businesses.

“I am shaking here tonight because I am going to be forced to lay people off. I’m going to take away their livelihood. That hurts. It really, really hurts. . . . And what I am going to have to do on Jan. 1 is to eliminate jobs, reduce hours — and as soon as hours are reduced, benefits are reduced.”

Instead, his business, the Cedarbrook Lodge hotel, is expanding, adding 63 more beds to meet demand. Instead of layoffs, he needs to hire more people. And his story is not the only one.

Tom Douglas, who runs fifteen restaurants in Seatac, warned that a higher minimum wage would force the shutdown of a quarter of his restaurants. Instead, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout Seatac.

Well paid employees pump money in to the local economies. This is basic economics, dating back to Adam Smith. Instead of slashing employees, which would impact any businesses ability to support their customers, they have turned to more direct approaches. A good example of this is MasterPark, an off-airport parking lot, which has added a $0.99 daily “Living Wage Surcharge“. Less than a dollar guarantees that MasterPark can give all of its employees a living wage, a small price to pay.

The biggest sign that the higher wage did not impact Seatac however comes with the news that the Seatac airport will be undergoing a half-billion dollar renovation and expansion. The growth of the airport, which as an extra-territorial administrative district does not require the higher minimum wage of the adjoining town, demonstrates that the fears pushed by the Koch Brothers and their multi-million dollar ad campaign are just nonsense.

They forgot the words of wisdom from President Franklin D. Roosevelt, in an address given in Cleveland, Ohio on October 16, 1936.

It is to the real advantage of every producer, every manufacturer and every merchant to cooperate in the improvement of working conditions, because the best customer of American industry is the well-paid worker.